How Witailer made +100M CPG Company achieve unprecedented growth on Amazon through a well-planned alignment of content optimization and advertising investment
The subject of this case study is an Italian group, owner of several well-known brands of body care, oral care categories, selective fragrances and health food products. The group had been selling its brands on Amazon for 5 years, but never achieved the desired results.
In August 2020 the company began its collaboration with Witailer and in the following 5 months its brands recorded an increase in sales of 179% YOY. The YOY growth of H2 was also significantly higher (+173%) than the YOY growth during H1 (93%). Such an acceleration would not have been possible without meticulous planning and alignment of content optimization and advertising investment activities to manage the group’s complex and diverse catalog.
In terms of content optimization, the project involved about 400 products. In the beginning, we decided to focus on the group’s best-selling products so as to further boost their conversion rate. We subsequently moved to work on the rest of the catalog, broadening the spectrum of secondary products involved as their sales, and thus also Amazon’s demand, increased. During the last quarter of 2020, the growth of our client’s brands was so high that they were unable to fulfill 40% of all orders received by Amazon.
Concerning advertising activities, our first step was to thoroughly structure the group’s advertising account. Campaigns were organized by brand into portfolios to better plan for strategic budget distribution across brands. Furthermore, we conducted thorough and continuous research to identify the most relevant keywords for each campaign. After that, we optimized the investment on these keywords with a focus on sales (ROAS), especially during the months of November and December. To make the most of the peak traffic period, spending was increased by 86% compared to the previous quarter, but nevertheless, the results of these campaigns were still positive in terms of efficiency. In fact, sales increased by 97% compared to Q3 and the Advertising Cost of Sales (ACoS) went from an average of 15.2% to 14.4%.
An analysis of category best sellers revealed that tea sets were climbing the best seller rank fast during the first half of Q4. Despite having a very similar product to these category bestsellers (a box set of herbal teas), the vendor was not receiving many sell-in orders. To exploit the product’s great potential we suggested our client apply for Amazon’s “Born to Run” program, which allows vendors to successfully launch their products faster by letting them choose their initial 10-week inventory position. In other words, Vendors taking part in this program are essentially telling Amazon that they believe a particular product is going to sell well and they are asking Amazon to purchase enough inventory to keep the item in stock. To further maximize product visibility during peak season we also recommended a 2-week best deal with a 20% discount on the tea set.
Our recommendation turned out to be correct and that box set has quickly become (and still is) one of the group’s best sellers in the food category. Also for this product, Amazon’s demand exceeded expectations and our client was able to fulfill only half of the sell-in orders during Q4 and the product has become one of the brand’s best sellers on Amazon. In the coming months, we plan to take advantage of the Born to Run program for other high-rotating products at risk of out-stock.
As of now, the collaboration between Witailer and the Italian group has been extremely positive with unprecedented results on the platform already in the first five months. From the beginning of Witailer work on the platform in August 2020 through December the group’s sales grew by 179% YOY and in the second half of the year this growth was higher (+173% YOY) than in the first half (+93% YOY). In Q4, the advertising investment was increased by 86% with respect to the previous quarter, and this allowed the group to achieve a 97% sales increase with a lower Advertising Cost of Sales (ACoS), from an average of 15.2% to 14.4%.
In the light of its experience in the past quarter, for 2021 the group will for the first time establish a production plan specifically conceived to meet Amazon’s demand, with a product mix vastly different from the one for large-scale retail trade, not to miss any more sales opportunities.
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